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At 7:50 PM July BoJ Monetary Base (exp 25.0%, prev 27.6%) At 1:00 AM June Household Spending (exp n/f, prev 1.6%)
The dollar was unable to maintain its resilience to weaker fundamentals, as it gave back gains following another bout of disappointing data in Thursday trading. The steep drop in manufacturing activity dragged the greenback sharply across the board, losing a yen to the Japanese currency.
Tokyo stocks were down for the second straight day, losing 84.43-pts to 9,793.51, as exporters led the decline. Growing concerns about the health of the US economy have begun to take its toll on Japanese shares. The Japan Automobile Dealers Association announced yesterday that sales of new vehicles in July fell 5.8%, marking the 11th consecutive month of decline. According to the MoF, foreign investors were net sellers of Japanese stocks in July for the first time since February.
The FinMin announced that it had cost the government around 3.8 trillion yen to curb the currency's appreciation in a series of market interventions conducted from May to June. The BoJ intervened in the forex markets seven times between those months, which exceeds the 3.2 trillion yen the bank spent to weaken the yen following Sept. 11.
USDJPY is off its session low of 119.01 and is now hovering at 119.21. Support stands at 119.20, the 62% retracement of 118.45-120.40, followed by 118.50 and 117.90. Resistance is seen at 119.50, 120, and 120.70, which marks both the 50% retracement of the aforementioned move, and the downward sloping resistance line from 133.81 (April 1) and 125.89 (June 13).
EURUSD is hovering at 98.36, after gaining ground on the greenback immediately following the ISM data. Resistance stands at 98.50, and 99.15, the 50% retracement of the decline from 1.0065 (July 25) to 0.9767 (July 29). Support is eyed at 97.50 and 97.13, the July low.
Markets will be paying close attention to tomorrow's US data, which consist of July Unemployment, June Factory Orders, June Personal Consumption, and July Labor Report.